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How Awesome UX Boosts Revenue in Four Mobile Business Models

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Macadamian In a NutshellMacadamian is a full-service

software design and development

firm. We create meaningful and

compelling user experiences for

mobile, web and desktop. With

more than 750 completed projects

worldwide, we’ve partnered

with some of the biggest brands

including Avaya, BitTorrent,

BlackBerry, Cisco, GENBAND,

Juniper Networks, Logitech

and Microsoft. We care about

the user and, as a result, create

products that delight you and your

customers. We are inquisitive: we

ask questions beyond the scope of

the project and we listen intently to

your answers. Our team bolsters

your capabilities and drives your

success. Learn more at

www.macadamian.com.

About the Authors

Scott PlewesVP, User Experience, Macadamian

Scott worked for more than 20 years in user experience design

at BNR and Nortel, and Maskery and Associates, before joining

Macadamian in 2006. Since becoming Vice President of UX in

2010, Scott has been instrumental in matching the right design

and technology choices to clients’ business goals. He embodies

the Macadamian philosophy that successful products are built on

committed business relationships, passion for design, and a true

desire to create a useful and delightful user experience.

Rob Woodbridge Founder, UNTETHER.tv

For the last 14 years, Rob has been immersed in the mobile

revolution in roles ranging from strategic advisor, board member

and coach to VP Operations and President & CEO. In each of

the companies he’s been involved with, he’s shaped strategy,

marketing initiatives and product development to extend

existing business into the mobile world — or flat out create new

businesses leveraging mobile.

1

Scott PlewesVP, User Experience, Macadamian

Rob WoodbridgeFounder, UNTETHER.tv

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Why data?Data is the new oil, and the app economy is flush with it. The data that is generated from the mobile devices we all carry can be incredibly valuable if used properly, and many developers are already leveraging that data to enhance their business models.

For example, wearable computing products, such as fitness wrist bands from Sony and FitBit, are leading the way in the consumerization of data from early adopters. The amount of data collected and shared from these devices is doubling every year. Meanwhile, crowdsourced GPS apps, such as Waze, are also prime examples of specific use cases where the data collected continues to grow in value as more people contribute to the application.

Given that the average smartphone owner looks at his or her screen over 150 times per day1, it is not surprising that more developers are trying to find the optimal way of collecting and monetizing the data generated by their applications. If your application is a reason that smartphone owners look at their screen multiple times a day and there is a large enough sample size, then the data that each visit provides is a business unto itself.

But how do you collect the right amount of the most valuable data to generate revenue from this untapped resource, and at the same time create a better end-user experience?

Choose the right approach for your applicationThere are two approaches to leveraging data as a bona fide revenue maker. The first is seen in most applications today: build an app that does something (feeds news, or stamps a location, or sells a product) and mine the data the app generates for trends useful to partners or advertisers. Targeting based on data commands higher premiums in location-based, contextual advertising, and does the same for guiding key business decisions.

For example, a newspaper’s mobile application collects demographic and location data from subscribers and allows the newspaper to do two things:

Charge more for hyper-targeted ads;

Glean insights from the data to expand its base to new markets.

The second approach is to find customers that need a specific data set and build an application that expressly collects that data set.

Ubiqi Health is a great example of this type of approach. It identified a need for more data on migraine patterns, built an app to collect the information, and then sold the anonymous data to a large pharmaceutical company that was developing medication to reduce the triggers of migraines.

Watch Macadamian’s

Scott Plewes

and UNTETHER.tv’s

Rob Woodbridge

dish more insights on the

data business model

and UX tips that boost its

revenue potential.

1 http://communities-dominate.blogs.com/brands/2013/01/an-attempt-to-validate-the-150x-per-day-number-based-on-typical-user.html

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You DON’T need a million usersAs long as the data is purpose-driven, you don’t need a million users to generate large volumes of information. Most sample sizes using non-mobile methods are in the hundreds or low thousands, and most of these aren’t as targeted as they are from mobile applications.

But you do need to determine the appropriate data to collect and the data to leave alone. Collecting too much data can, potentially, spoil it, so only collect what you can use.

You DO need user permissionJust because data can be collected doesn’t mean it should be. If you are going to collect data, then there should be an explicit agreement between you and the user of your app that allows you to collect the data you need. Abuse that agreement, and it could be the end of your relationship with the user, compromising current and future revenue opportunities.

Leverage the real-time opportunityMining data is a science, one that requires considerable expertise. That’s why many developers interested in exploring the data side of mobile revenue have hired data analysts or even data scientists to help them determine what can and can’t be monetized and how best to do it.

Data that can be monetized is available in two forms: anecdotal and real-time. Anecdotal data is powerful for outcome-based, long-term trending and analysis. Real-time data offers an incredible opportunity to generate revenue because, when used properly, it can have an immediate impact on a business.

Real-time data collection involves collecting data as it happens and then reacting to it immediately. One example is the use of real-time data for customer service — not for handling complaints, but for handling such things as long lineups at a washroom or cash register, inventory control, traffic, emergency situations, or even personal or family security.

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Understand big data’s influence on the user experienceFor most businesses embarking on data collection there are two things to consider when building a strategy:

1. How to use the data collected to understand user behavior;

2. How to leverage the data to re-engage with users.

1. Use data to understand user behavior and improve the user experience

The single, most important reason to collect data from the use of a mobile application is to understand how you can increase your app’s usefulness to your end customer while enhancing the overall app experience. Mining data, in simple terms, means observing the features that bring users back or turn users away. A perfect example of this is an app called Bump, one of the top 10 most downloaded applications of all time from the Apple® AppStore.

Bump was built to replace the paper-based business card. Two users who have the app can bump their phones together and their digital business cards transfer between phones. Since its launch in 2007 over 100 million people have downloaded Bump. Through the years, the founders added new features

that allowed users to share photos and files, and even send direct messages to people with whom they’ve connected through the app.

In short, the app started to get complicated and away from its original intent. As part of a rigorous assessment of the state of its app, the Bump team started to collect and look at usage data as it embarked on developing version 3.0 of the software. What the team saw changed its development plans and the product focus.

From the data, the developers noticed that a considerable number of the newer features were barely used and resulted in higher than normal support requests compared with the more established features. They also found that these features added a level of complexity to the design and aesthetics of the app, leading to a drop in usage of the core features over time. As a result, a trimmer, more focused version 3.0 emerged, which led to higher customer satisfaction and a lower number of user support requests.

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2. Use data to revitalize your app and re-engage users

Research shows that 80 to 90 percent of downloaded mobile applications are launched only a single time2, and then forgotten or deleted. There are so many applications available with so much overlap that the challenge has become how to re-engage users that have already downloaded your application. This is where the application of collected data becomes powerful, provided the app itself is useful, as is the case with an app called Twist.

Twist is an application designed to ease the frustration of being late for a meeting. It makes running late less stressful by leveraging big data to let people know when you’re going to arrive. The application is based on a simple premise, uses multiple data points, and works in the background.

Once a user downloads the app, it pulls in the user’s calendar. Then it locates the user’s upcoming meetings via GPS, pulls in traffic data, and provides

an optimal time for departure to help the user avoid being late. Upon departure, the other parties in the meeting receive a notice that the user is en route with an estimated time of arrival (ETA). If any of the other parties have the app installed, they can see the progress of all parties heading to the meeting, including any delays, and can adjust their schedule accordingly. Using this app allows everyone to arrive at the same place at the same time, and the meeting can start without anyone having been stuck waiting.

The key to the usefulness of this application is the automated process by which it draws the user back into using it. It is always on, running in the background, and engages the user only in the context of a meeting. The user is notified when he or she should leave (engagement #1), when a message was sent to the other participants (engagement #2) and whether the other parties have arrived or are delayed (engagement #3). Then it goes silent until the next meeting. It’s a simple engagement in context with an important activity.

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Watch Macadamian’s

Scott Plewes

and UNTETHER.tv’s

Rob Woodbridge

dish more insights on the

data business model

and UX tips that boost its

revenue potential.

SEAN: 8 MINUTES

2 http://techcrunch.com/2013/03/12/users-have-low-tolerance-for-buggy-apps-only-16-will-try-a-failing-app-more-than-twice/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29

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Tap the well and manage the flowLittle touches like these create a better end user experience and keep users engaged with an app. Ultimately, more usage leads to more data that can be monetized, either in real time or anecdotally for long term trending and analysis. In an environment where data is akin to oil, tapping the well properly and managing the flow carefully are the keys to generating more revenue.

Learn more about the most prominent mobile business models and the UX best practices that can improve each model’s revenue potential.